Stablecoins are a digital currency pegged to a “stable” reserve asset such as the US dollar or gold, designed to reduce volatility relative to unpegged cryptocurrencies such as bitcoin. Because the price of stablecoins is pegged to a reserve asset, they bridge the worlds of crypto and fiat currency, such as the pound sterling, the euro, or the US dollar, significantly lowering the volatility of stablecoin when compared to a cryptocurrency such as bitcoin. Consequently, some consider stablecoins to be better suited to almost everything, including everyday commerce and making transfers between exchanges.
As the name suggests, stablecoins are designed to function with stability. Multiple sources back stablecoins, including fiat currency, but also other cryptocurrencies, precious metals and algorithmic functions. However, a crypto’s backing source can influence its risk level. For example, a fiat-backed stablecoin may have greater stability because it is linked to a centralised financial system that has an authority figure, such as a central bank, that can control prices when valuations become volatile. However, a stablecoin that isn’t linked to a centralised financial system, such as a bitcoin-backed stablecoin, may change dramatically because, in part, there isn’t a regulating body to control what the coin is pegged to.
Fiat-backed stablecoins: Investors use their fiat currency, whether it be US dollars or euros, to buy stablecoins that they are later able to redeem for their original currency. Unlike other cryptocurrencies that can fluctuate dramatically, fiat-backed stablecoins aim to have limited price fluctuations. However, this does not mean that there is no risk involved. It’s important to note that they are still relatively new and have a limited track record.
Crypto-backed stablecoins: This type of stablecoin is backed by other crypto assets, and because this backing asset can be volatile, crypto-backed stablecoins are overcollateralized to ensure the coin’s value. These assets are more volatile than fiat-backed stablecoins. Consequently, as an investor, it’s wise to keep an eye on how the coin’s underlying crypto asset is performing.
Precious metal-backed stablecoins: These coins use precious metals, such as gold, to help maintain their value. They are centralised, which may be considered a disadvantage by some. However, this also protects the coins from crypto volatility.
Algorithmic stablecoins: Algorithmic stablecoins are often considered to be the most difficult to understand as they aren’t backed by any asset. Instead, they use a computer algorithm to prevent the coins’ value from over-fluctuating. For example, if the price of an algorithmic stablecoin is pegged to $1 but the stablecoin becomes higher, then the algorithm would release more tokens automatically to bring the price back down. Similarly, if the value drops below $1, then the algorithm would reduce the supply to bring the price up again.
As well as reduced volatility, there are several benefits to stablecoins:
Despite the benefits of stablecoin, there are nonetheless several risks to be aware of:
While there are many great benefits to stablecoin, there are also significant risks that need to be thoroughly researched and considered. Additionally, there are also many different issuers of stablecoins, with each offering its own policy and varying degrees of transparency. Stablecoin may be highly appealing, but it’s important to tread as carefully as you would with any other type of investment.
This article does not constitute financial advice. The author and Universal Media Ltd. are not qualified financial advisers. All investments are made at the reader’s own risk.
The record-breaking surge comes amid an ongoing cryptocurrency rally that has been attributed to hedging risks from inflation. Analysts predict there will be a further rise in the coming weeks.
This latest surge trumps the previous record high, which was set last month when the cryptocurrency reached nearly $67,700. Just five years ago, a single bitcoin was worth approximately $700. This year alone, bitcoin is up by over 130%, while ethereum is also up by an impressive 550%. The rise comes despite concerns surrounding cryptocurrencies by some critics.
Explaining the rising popularity of crypto, Wilfred Daye, the head of the trading platform Securitize Capital, said: “Inflation is a major consideration for investors today, and the younger generation of investors often favours cryptocurrency as a hedge over gold. In fact, while gold has slid throughout the year, bitcoin and ethereum have more than doubled. Retail investors have played a major role in fuelling this shift and institutional investors are increasingly following suit.”
If you want to contribute to computerised cash, we'll look at the best 5 cryptocurrencies. This post will also look at recent developments and the benefits of digital currency purchases of the bot.
Created in October 2011 by Google programmer Charlie Lee as "the gold of the Silver to the Gold of Bitcoin," Litecoin was released. While Litecoin has also developed a peer payment currency, it has several key advantages over Bitcoin including lower transaction charges and a faster payment processing method. In reality, LiteCoin was one of the first bitcoin forks and was developed to be open to a broader spectrum of miners with the use of a different mining algorithm (Scrypt instead of SHA-256).
The goal was to prevent Bitcoin from mining centralisation, but subsequent developments of advanced mining technology that is aimed at the Scrypt algorithm have now far outstripped the reach of everyday PC consumers of Litecoin.
This being said, the shorter processing times and lower fees of Litecoin are more useful than bitcoin for daily transactions. It can't however match Bitcoin as a value-store and possibly will never reach the same legendary status and widespread popularity the first digital currency in the world enjoys.
Ripple has built up a worldwide settlement network to turn cross-border transactions and deliver instant, secure, and inexpensive foreign payments. The existing global payment infrastructure is dated. Transactions not only take days to complete, but exchange rates and charges paid by banks and other intermediaries ensure that sending money abroad is a high cost.
XRP is a digital currency for facilitating RippleNet transactions. Unlike bitcoin, the consensus mechanism of Ripple doesn't help mining, but several other coins in this list. However, payments for minimum transaction costs of 0.00001 XRP may be resolved in less than five seconds. Whilst bitcoin's network is up to around 7 transactions per second, it can deal with 1,500 transactions per second for Ripple's network.
Despite its place at the top, bitcoin does not perform well the more people use it, the more its network fails to maintain, resulting in sluggish and costly transactions. During 2017, the bitcoin community held heated debates about how to best solve this issue, with some people wanting to increase the block size and others keen to retain the current block size and restructuring how data is stored in blocks.
The minority who wanted to raise block sizes could not find consensus, forcing Bitcoin's Blockchain off the ground on August 1, 2017. In contrast to Bitcoin's one MB, this new currency has an 8MB block size with verified transactions in minutes at much lower costs than Bitcoin transfers.
While many in this and all other hard forks remain sceptical about this and other cryptocurrencies since then the company has cemented its place in the top five of its cryptocurrencies. Although it's nowhere as well-known or valued as its bigger sibling, for everyday transactions it's far more useful.
When you use it online, Monero is built to protect your privacy. If you value your privacy. The peer-to-peer currency was launched in April 2014 and is designed to deliver anonymous and untraceable transactions. Monero empowers holders to send and get stores without the root, entirety, and goal of an exchange that's accessible to somebody else, through several privacy-oriented innovations. Although Bitcoin is widely seen as enabling anonymous transactions, it is possible to de-anonymise payments sent over the bitcoin network. This means each bitcoin is the same as the next, but it can be defaced by its connection to previous transactions such as if it were stolen from an exchange.
A further important distinction between bitcoin and Monero is that although Monero's CryptoNight algorithm battles against mining centralisation, it is designed to fit ordinary CPUs and GPUs to mining. Monero was forced in April 2018 to avoid the mining of the network by costly ASIC machines.
At first, discharged in October 2016, Zcash can follow its roots back to an extent called ZeroCoin, which was initially outlined to move forward namelessness for bitcoin users. In case you select the protected choice, the sender, sum, and beneficiary of the exchange are all hidden. Just like bitcoin, Zcash contains the greatest supply of 21 million coins. It’s moreover a proof-of-work cryptocurrency that can be mined, even though its Equihash calculation is outlined to supply resistance to ASIC mining technology.
If you need to contribute to cryptocurrencies, you've got to require some time to memorise approximately computerised monetary forms. Not as it were that, you just ought to moreover learn how to study market patterns. While contributing to cryptos can be exceptionally beneficial, it can too bring gigantic misfortunes. You've got to know when to purchase or offer. Cryptocurrencies are promising choices.
The vision of Satoshi Nakamoto for Bitcoin to promote financial inclusivity has more likely been met considering the boom of the crypto market in third world countries such as those in Africa. It is noteworthy that the daddy of all cryptocurrencies was created so that there would be a chance for outsiders to gain access to an informal financial system with a digital platform. No wonder it has opened investment opportunities on trading platforms such as the BitiQ website for the African people renowned for using cryptocurrencies.
A report has recently claimed that Africa has become the global leader in terms of cryptocurrency adoption. Despite attempts of the government to restrict operations by mandating banking institutions to cut ties with crypto exchanges, the market was able to survive with a shift into a platform that no longer needs local banks as intermediaries. And the crypto market has flourished since then, away from state regulations. It appears that the free market is working at the advantage of African investors.
While Africa is still in the phase of adopting cryptocurrencies, perhaps it would be fair to say that Asia has already been immersed in this market. A study conducted last year claimed that over 30% of crypto transactions took place in East Asia, which includes China, Japan and South Korea. The trend is expected to carry on as countries in other parts of Asia are being drawn into the market. It would buffer the impact of China now shutting its doors to foreign cryptocurrencies.
Moreover, Japan has been among the most progressive countries in Asia to embrace opportunities brought about by crypto trading. It has managed to strengthen laws to protect the local crypto market from cybercrimes in the likes of hacking and money laundering. There has also been a regulation of crypto exchanges through documentary requirements that would prove legitimacy. More likely, this will be an additional layer of protection taken as a preventive measure to deter cyber crypto heists.
It can be recalled that the founder of this cryptocurrency originally intended the use of virtual money as a medium of exchange. Following the historic move of El Salvador declaring Bitcoin as an official legal tender in the country, there is so much expectation hanging over its shoulders. The government anticipates economic growth brought about by overseas remittances in the form of Bitcoin. Besides, it is a practical approach for a developing country with people devoid of access to the financial system.
Paraguay is set to follow in the footsteps of its neighbour with the intention recently made known by one of its lawmakers. A bill has been submitted in Congress to legitimise the use of Bitcoin as an official legal tender. The legislation intends to bank on the financial opportunities drawn by the crypto market. Like El Salvador, the nation is poised to become the next crypto hub in the region.
America has been the ultimate hub of cryptocurrencies, with Bitcoin finding its roots in San Diego, California. From paying for some Papa John’s pizza, there is no doubt that the father of all cryptocurrencies has come a long way. It is considered the market leader after gaining a huge number of followers still on board. The United States is now facing challenges on how to best regulate the crypto market to protect investors. As the SEC Chairperson has put it, he is neutral in terms of technology but not in terms of consumer protection.
Consequently, the Chairman of the Federal Reserve has already expressed his intention to promote crypto regulations. He is advocating for the possibility of digital banknotes and stable coins to compete with cryptocurrencies. These virtual currencies would be backed by the government’s financial system to draw the interest of investors, given the relatively low risks.
This is how the crypto market has taken the world one region after another all through the years from the United States, Latin America, East Asia, and Africa.
The emergence of bitcoin private in the industry has expanded the opportunities among many traders. They are able to have multiple investment options depending on their goals and priorities. But deciding which crypto asset to take is not always an easy choice. There has to be a proper assessment of the pros and cons, taking into account the market stability and potential growth. A good choice for your trading and investment journey is the Bitcoin Evolution app.
As of January 2021, there are more than 4,000 cryptocurrencies in existence. Each one has its own unique advantages from the developer’s perspective. But the truth is, standing in the market would distinguish profitable crypto from a losing one. For investors, it is very crucial to exercise prudence when making such a decision. It’s like any other business venture, and you have to be certain that the risks are manageable and the gains are high.
Essentially, bitcoin private was born out of community-driven initiatives way back in March 2018 from the existing bitcoin and Zclassic hard fork. The developer’s main goal for introducing this new crypto in the market is to combine the inherent privacy features of the Zclassic crypto with the security, flexibility, and popularity of bitcoin. These combined features enhance the network by having transparent and shielded transactions. For instance, the sources and destinations of all funds and amount values are transparently and securely stored on the blockchain. On the other hand, the shielded transactions keep the data into a special section of a block, allowing verification among users but very difficult to decode for any third party.
For users who value privacy and anonymity, bitcoin private can be the best choice. It has specific technology that guarantees better security and quicker processing than other cryptos like bitcoin. Despite this tight protection, the coin’s database remains open-source, allowing viewing and verification among participants. There are also no intermediaries during transactions between users, given the decentralised system where it operates.
Enhanced security and privacy is what bitcoin private offers among crypto traders. It gained much prominence in the middle of the 2010s, but eventually, some technical issues led to the decline of transactions. Problems on speed, cost, and energy consumption have arisen as higher transaction volume resulted in backlogs. Some analysts have considered this dilemma as evidence that bitcoin cannot still stand to become a unit of exchange in its current state. Like bitcoin, the total coin supply for bitcoin private is also set at 21 million. While its platform maintains anonymity, all transactions can still be traced in actual scenarios. Likewise, despite keeping all the data private, it is possible to identify users with their public keys. To address this matter, bitcoin private worked on merging bitcoin’s protocol with the privacy features of Zclassic. Presently, users can generate either public or private addresses, allowing redemption of transactions to either address type.
During its initial year in the industry, bitcoin private was widely welcomed due to its privacy and security features. It ranked 46th when it was launched and had a market share of around $550 million. Eventually, it struggled to make progress for several factors, such as pre-mining of 96.6% of its total amount of tokens with only 3.4% remaining for miners.
The present status of bitcoin private on smaller exchanges is not as good as it was then. In fact, just a year after its launching, it already faced struggles to survive in the industry. According to recent reports, the crypto was given an “F” rating on the industry’s asset score. However, it confronts uncertainty with several delistings from its remaining exchanges.
Bitcoin private is one of the thousands of cryptocurrencies in circulation today. Like other virtual assets, it confronts issues affecting its stability and growth in the market. Investors have to acknowledge that the crypto industry is highly speculative and unpredictable. Meaning that the value of digital currencies may spike or plunge over time depending on several factors. Exercising prudence in crypto investment is always a good idea.
It comes down to personal choice, but as life becomes harder for most people nowadays, they need to invest even in small capitals is an ideal way of earning an extra on the side. Today, when people talk about small investments, cryptocurrency is a viable option. It does not require a huge sum of money to get started, but it’s an advantage if enough budget is allocated to achieve financial targets. On the one hand, real estate is often associated with large investments. This type of investment has also been generating more profits among investors because the demand is constant. Both of these investment types can be included in your portfolio; that’s what diversification is all about. But if you’re stuck between choosing only one, the following facts may be of help to make the right decision. To start an investment one should use a regulated crypto trading platform such as the Bitcoin System.
Cryptocurrency started way back in 2009, with bitcoin as the first coin ever introduced to the market. It aimed to simplify payment transactions and served as a better alternative to the existing financial system. But its platform has a wide-ranging use to facilitate other transactions such as trading with other types of currencies. Many investors were attracted to the opportunities that it offers, and it proved to be a good decision when some of them were able to acquire more profits. There were investors who even became millionaires in a short span of years. Presently, there are over 4,000 cryptocurrencies that cater to the needs of millions of users worldwide. Most people see this trading platform as a practical way to secure and grow their assets.
Some financial experts believe that investing in real estate is one of the best ways to save for retirement and build wealth. It has been a steady market that has already stood the time as an investable asset. There are multiple ways that you could invest your money in this industry. You may invest with developers, house flipping, wholesaling, and Real Estate Investment Trusts, among others. This is a popular type of investment, and it offers promising advantages that other assets may not be able to provide.
To answer the question, you have to look at the pros and cons of each investment type. They are both good investments, but depending on your priorities, you can judge based on their potential to grow your assets.
Fact #1: Cryptocurrency has a low barrier to entry because investors can purchase coins with smaller capital. On the other hand, real estate is costly to own and maintain. You may have to allocate thousands to millions of funds to make an investment. There are also responsibilities that real estate owners have to comply with, unlike the case of cryptocurrency, which is decentralised, and users can make trading transactions on a peer-to-peer basis.
Fact #2: Real estate can bring a steady source of income through sales and monthly rentals. It can also provide tax breaks and deductions that could reduce operational costs. On the other hand, cryptocurrency can have long-term gains, just like what happened to successful bitcoin investors. Other coins also have the potential to grow small investments, especially when the market is performing well.
Fact #3: Cryptocurrency is not a tangible asset, meaning you cannot hold a bitcoin in your hand because it’s a digital currency. It can expose your asset to cyberattacks, and the lack of transparency may make it hard to determine the exact value of a coin. On the other hand, real estate is a tangible asset that has intrinsic value. It is also a necessity as people will always need a place to live, work, and do other things.
Fact #4: Real estate is not as liquid as other investment types, meaning it cannot be traded quickly. It may take several months or years to find a buyer for a property. On the other hand, cryptocurrency is highly volatile, meaning the prices of coins may be highly unpredictable due to factors at play. Investors may need to study the market properly in order to make sound trading decisions.
Cryptocurrency and real estate are both good investment options. Whether which one is better would primarily depend on your criteria. You have to weigh the pros and cons and decide whether you can handle the risks and requirements for your chosen investment. Likewise, you may consider investing in both vehicles because it’s always possible as long as you have enough capital.
On Friday morning, bitcoin was up 2.5% to trade at $58,884. The cryptocurrency’s all-time high currently stands at around $62,000, which it reached back in April of this year. The world’s second largest crypto by market cap, ethereum, was up by around 4% to trade at $3,753.
While the SEC is yet to make any comment, there has been widespread speculation on the SEC approving bitcoin ETFs, prompted by a tweet posted by the SEC’s investor education office on Thursday. The tweet said, “before investing in a fund that holds Bitcoin futures contracts, make sure you carefully weigh the potential risks and benefits.”
Meanwhile, Bloomberg reported that the SEC “is poised to allow the first US bitcoin futures exchange-traded fund to begin trading in a watershed moment for the cryptocurrency industry”, with the article citing people familiar with the matter.
The idea of retirement is changing quickly. People are no longer content with working for the same company for decades and then living on a modest pension. Many invest their money, so they can retire early and ensure their retirement funds are much more substantial. If you are up for this, you need to have a good understanding of how to get good returns, and why cryptocurrency as a type of investment is becoming popular.
Bank savings accounts don't work anymore. Interest rates around the world are approaching 0% as banks try to stimulate the economy. That means you earn almost nothing for placing money on deposit. It gets much worse than that. The financial crisis in 2008 and the coronavirus pandemic are only some of the events that make governments print more money than ever. 40% of US dollars in existence were printed in just 18 months in 2020/2021, which inevitably leads to inflation. Prices of goods and services will increase over time, effectively making your money decrease in value.
The combination of 0% interest rates and huge money printing means that the old retirement playbook no longer works. If you want to grow your wealth with compound interest over time, you need to invest in other assets. One asset that is immune to inflation is cryptocurrency.
Cryptocurrency has caught the attention of retirees because of its immense returns over the last few years. Investing $1,000 in Bitcoin in October 2016 would have got you a 1.57 BTC, which now amounts to almost $79,000. If you invested the same amount in Ethereum in 2016, it would now be worth about $300,000. These returns on investment are ridiculous. It's why there are so many Bitcoin millionaires in the world. So, what is driving such insane growth in the value of cryptocurrencies? The first reason is the growth of the crypto market. It is expanding quickly, and those that invest early reap the rewards. Crypto still likely has a long way to go in this regard, as the technology has not made it to the mass adoption point yet.
However, there's something else going on. Bitcoin and many other cryptocurrencies have a tightly controlled supply. There are only 21 million BTC that can ever exist. This is written into the Bitcoin protocol and will never be changed. Because of this limited supply, the coin is immune to inflation from money printing as we discussed earlier. In fact, Bitcoin is deflationary in nature, meaning when you hold it, prices will seem to deflate relatively to your currency. This is a great thing for you as an investor.
Another benefit of investing in cryptocurrency is that crypto assets are weakly correlated with other traditional assets. Price changes in the stock market or currency markets don’t automatically bring cryptocurrency prices with them. This means cryptocurrency is a great way to diversify your investment portfolio. It works as a defensive asset to hedge against crashes in other areas of the economy.
If you want to add digital assets to your retirement investment portfolio, you’ll need a plan to do it successfully. The first step is to get started. Cryptocurrency is still growing in value quickly, and the earlier you can get in, the better. The market may go up and down after you buy, but remember: this is a long-term investment. Try not to get too caught up in the ups and downs of the market.
If you're new to cryptocurrency, you'll also need to educate yourself. Investing in crypto is a little different from other assets. There are some technological and legal hurdles to overcome. These may be very easy or difficult, depending on where you live. You can follow many crypto influencers to learn more about cryptocurrency. Or, you can also take some of the many online courses to get familiar with specific cryptocurrencies.
The most important thing when investing for retirement is to diversify. When you're going for the long term, anything can happen in the markets. Having all your eggs in one basket is a terrible idea when looking for good returns over decades. So, don't put all of your pension in Bitcoin. This means diversifying beyond crypto (have traditional assets like stocks, gold, etc. in your portfolio) and also diversifying within crypto (having multiple cryptocurrencies in your crypto portfolio).
Keep in mind that cryptocurrency is a risky asset. Many people have made a ton of money in cryptocurrency, but just as many have lost considerable sums of crypto, too. Cryptocurrency is volatile and can suddenly crash in value. This happened many times in the past. Cryptocurrency is also vulnerable to hacks and theft if you don't look after it properly. Then, there's a simple risk you might 'lose' your cryptocurrency by losing your “keys” (like your crypto password). If this happens, it's gone forever. Many governments haven't yet officially decided on the legal status of cryptocurrency, so the legal risk also exists. If you want to invest in crypto for retirement, you're going to be a pioneer. No generation has done this before. The risks are real, but the rewards can be very large.
In some countries like the USA, you can already save cryptocurrency on your self-directed Individual Retirement Account (IRA). They work just like regular IRAs, except a self-directed IRA allows you to hold alternative asset classes like cryptocurrency and real estate.
One of the biggest advantages of having crypto as a retirement investment is the diversification of your portfolio. The more diverse it is, the more protected your account will be in case of any market downturns. With the crypto market growing in popularity each year, there is also a high chance that it will bring you large financial benefits if you invest in it now. Amongst the main disadvantage of having cryptocurrency as your retirement investment is its high price volatility. Take Bitcoin as an example: in December 2017, its price dropped to $14,000. Although the price increased and reached new heights in 2021, many might pick a more stable alternative to crypto.
Investing for retirement is getting trickier with time. Gone are the days when you can just leave your savings in a bank account and earn high interest from the bank. Now, inflation is silently eating away at the savings of those that aren't aware of it. Cryptocurrencies are a new inflation-proof asset class that provides extremely high returns for long-term investors. Just be prepared for a wilder investment ride than other long-term assets.
Shane Neagle, Editor In Chief at The Tokenist, talks us through the difference between Bitcoin CFDs and Bitcoin binary options.
There are countless horror stories of people losing access to funds or accidentally locking themselves out of their wallets and losing their hard-earned gains. However, thanks to Bitcoin’s volatile price action, there can be an abundance of trading opportunities for traders who know what they’re doing.
This is where financial contracts can bring added forms of value. With CFDs (contracts for difference) or binary options contracts, investors can strategically use one of these instruments to trade Bitcoin’s price movements — without having to worry about paying transaction (miner) fees, keeping hold of private keys or worrying about Bitcoin restrictions in their country. For this sort of trading, there are two options we’re going to look at here: CFDs and binary options for trading Bitcoin. Both have their pros and cons and the decision of which one to choose will be based on a specific trader’s own objectives, as well as personal preference and risk tolerance. Let’s take a closer look.
A Bitcoin CFD (contract for difference) enables buyers (clients) to take advantage of an underlying asset's price movement by selling to the seller (CFD brokers). By using CFDs, traders do not actually own the underlying Bitcoin and can use fiat currency to place their trades. This often works out cheaper for traders as it means not having to worry about Bitcoin network fees for buying and selling their BTC, as well as allowing for more effective HFT (high-frequency trading) as there is no need to wait for Bitcoin transaction confirmations on the blockchain. Investors can use Bitcoin CFDs to speculate on whether they think the price of BTC will rise or fall - allowing for both long and short trades to be placed.
Advantages
Disadvantages
A binary option is an artificial instrument where the payout is either a fixed amount of a predetermined revenue, or nothing at all. Binary options, as can be implied from the name "binary," deliver an outcome dependent on a "yes or no" proposition. Traders predict if the price of BTC will rise or fall by the time a specific timeframe is reached. The trader receives a payout if the Bitcoin binary options contract expires as predicted (referred to as ‘in the money’), and would lose all of their capital if it goes the other way (referred to as ‘out of the money’).
Binary options are best used for more “sure bets”. An example could be predicting that Bitcoin will rise in price after a halving event, whereby the miner block rewards are halved. These events happen every four years and are typically followed by a rise in price after an initial crash. A trader would not need to know what price level would hit, unlike a CFD, only if the price will be higher or lower than the specified strike price at a date in the future. Many top binary options brokers now accept deposits via Bitcoin, reflecting a trend in the growth of Bitcoin’s popularity and its increasing legitimacy as an asset class.
Advantages
Disadvantages
One of the most important things to get right when holding Bitcoin is storing it safely. For investors who prefer to skip these preliminary procedures, trading derivatives is a solution. By using Bitcoin CFDs and binary options contracts, traders can gain exposure to Bitcoin prices without having to adhere to the security measures associated with it.
Other advantages of these instruments include ease of execution and low trading fees — in many cases fees tend to be below 1%. On the contrary, some crypto exchanges can charge high fees—up to 5%—for Bitcoin purchases and trades, particularly when online credit card payments are used.
Trading derivatives rather than the actual asset is a double-edged sword. While there won't be safety aspects to worry about, traders do not own the underlying asset. For Bitcoin, owning private keys is considered the ultimate point of the enterprise among many of its investors. As Bitcoin's whitepaper outlines, the leading cryptocurrency was created to remove the need for intermediaries. In other words, if one does not have self custody of their Bitcoin holdings, then it can be said that they don't really “own them”.
Last but not least, there are also weak industry regulations and liquidity risks associated with CFDs and binary options. It is worth noting that trading CFDs is illegal in the US, and binary options are only available on certain exchanges.
Bitcoin CFDs and binary options both have slightly different use cases. Bitcoin CFDs are best used when a trader is confident Bitcoin’s price will hit a certain level. For instance, if Bitcoin is valued at $40,000 and a trader predicts the price will rise, they can open a long CFD position. It is worth noting that CFDs have no expiry date. A trader can hold their position for as long as they are willing to pay the "premium" (the charge on holding an active position overnight). However, CFD positions can get very expensive after being open for six weeks since they attract levy financing charges.
Suppose BTC price reaches $42,000 after two days. If the trader decided to close their position, the net profit would be calculated on the $2,000 price difference. How much profit is made will depend on how much money was staked in the trade, as well as subtracting any costs (commission, spread, and the premium for two nights).
Bitcoin binary options are best used when a trader is confident about the direction of Bitcoin’s price but is not sure to what extent the price will be higher or lower than the selected threshold at the time of expiry. This means that, unlike CFDs, these contracts have an expiry date that will trigger at a predetermined time and date.
At the point of expiry, if the prediction is right, profit can be taken. However, if it's wrong, the trader loses all their invested money in the trade. When compared to CFDs, binary options carry a larger risk due to their lack of risk management tools, but have much smaller trading fees and hold the potential for larger profits.
One way to get exposure to Bitcoin price moves is by trading derivatives like CFDs and binary options. Each of these financial instruments come with their own advantages and disadvantages, and traders need to choose the one that best fits their needs. It is worth bearing in mind that trading is highly risky. A large portion of retail investors—involving both CFDs and binary options—lose money. Therefore, never trade funds you cannot afford to lose and always do your own research before investing your capital.
On Friday, ten powerful Chinese government bodies, including the central bank, announced that overseas exchanges were banned from providing services to mainland investors online. This had previously been a grey area.
Binance and Huobi Global, two of the globe’s largest crypto exchanges that are especially popular with Chinese customers, have stopped new registrations of accounts by users in the country. Huobi has also promised to clean up existing Chinese customers by the end of 2021. Speaking to Reuters, Huobi co-founder Du Jun said: "On the very day we saw the notice, we started to take corrective measures.”
On Monday, shares in crypto-related firms fell with investment holdings company Huobi Technology plunging 23% and fintech company OKG Technology dropping 12%.
In an announcement to clients, TokenPocket, a popular service provider of crypto wallets, said it would be terminating services to mainland Chinese customers to avoid violating Chinese policies. The provider said it would actively embrace the new regulations and said it welcomes cooperation from China in blockchain tech.
In 2017, many Chinese crypto exchanges closed down or relocated offshore as China banned such platforms from converting legal tender into cryptocurrencies and vice versa. In May of this year, China’s state council announced plans to ban bitcoin trading and mining altogether, despite China once being the largest bitcoin trading and mining centre in the world.
Bitcoin is a very popular crypto that was created in 2009. Because Bitcoin is a digital currency, it cannot be physically used. Many people see this cryptocurrency as an excellent investment. Some supporters even believe that it could be the currency of the future. There is a limited supply of Bitcoin, and no more will be created after about twenty years, so having it can be a great idea. Some people say that the government will be able to purchase it one day. As a result, these limited Bitcoins of yours may be in high demand. In any case, never invest more than you are willing to lose.
Each Bitcoin is a computer file that is stored in a device known as a “digital wallet.” Every transaction is recorded in a public list known as the blockchain. The main thing most people are really interested in – is it secure? Because every transaction is publicly recorded, it is extremely difficult to create fake Bitcoins or spend ones you do not own. However, you could lose your wallet or delete your crypto and lose it forever.
Let’s go back to advantages now and start by saying that Bitcoin is decentralised and digital, which means that with it people have the freedom to exchange value without the use of intermediaries. Bitcoin is faster, more secure, and less expensive. This is the main reason why many people use it to buy everyday utilities. For example, you can even buy a variety of gift cards with Bitcoin including gift cards for Airbnb, PlayStation and even Walmart. Basically, banks control cash, whereas Bitcoin has owners. Also, it is very important to mention that there is no way to duplicate a Bitcoin. It is a global digital currency. There are no exchange values or third-party interventions. Bitcoin enables cross-border transactions by maintaining a ledger on the backend. Also, when you pay in cash for goods, your bank can track the transactions. When using a credit card, you must provide personal information. Bitcoin, on the other hand, allows users to remain anonymous, which means they do not need to share financial information. Let‘s not forget that you can send Bitcoins to the recipient in a matter of seconds with the help of a Bitcoin wallet. These cryptocurrency transactions are irreversible, and they cannot be cancelled. Also, it is important to remind you that customers are charged high transaction fees by the majority of credit card companies. You must also pay overdraft and minimum balance charges. To avoid all of these fees, you should consider using Bitcoin.
As you can see, Bitcoin has loads of advantages over traditional payment methods. It is secure, less expensive, faster, and banks have no control over it. Also, it has very low fees, so if you want to avoid high transaction fees, overdrafts, and minimum balance charges, it may be a good idea to buy some cryptocurrencies. But in the end, it is all up to you to decide if you really want to use it. Do not forget that you can always have both of them – cash and cryptocurrencies at the same time.
On Tuesday, the price of bitcoin crashed to its lowest in almost a month. The cryptocurrency fell from $52,000 to under $43,0000 at one point. An opposition politician accused the fall of causing El Salvador, one of Latin America’s poorest countries, to lose $3 million.
Major platforms such as Huawei and Apple weren’t offering the government-back digital wallet, Chivo, and servers had to be taken offline as they failed to keep up with user registrations. However, as the day went on, the digital wallet started appearing on an increasing number of platforms and was accepted by big companies such as Starbucks.
El Salvador’s government had given its citizens $30 each of bitcoin to encourage its adoption. The government believes that the cryptocurrency could save the country $400 million a year in transaction fees on funds from abroad. However, the BBC calculated this figure to be closer to $170 million.
As bitcoin fell 20%, over 1,000 protesters gathered outside El Salvador’s supreme court where fireworks were launched and tyres were set alight. Beyond accusations of financial instability, critics also say that the adoption of bitcoin in the country may fuel illicit transactions.
